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2012: An Opportunity to Renew Your Focus on Your Company’s 401(k) Goals

Posted on Dec 13, 2011 by  in 401(k) Retirement Planning, Changes in the Law: What You Should Know, Retirement Plans for Business

The stock market in 2011 may have had more than its fair share of ups and downs, but you shouldn’t let that distract you from your goal of promoting retirement readiness.  Rather, the start of the New Year can be the perfect opportunity for you to renew your focus on your company’s retirement plan and make sure that you are prepared for several impending changes.

The Department of Labor (DOL) has already announced that it will be zeroing in on retirement plans in 2012.  There are indications that Congress may take up retirement plans as well.  Here are a few changes that you should watch for in 2012 that will have an impact on your company’s retirement plan:

Service Provider Disclosure:  In April of 2012 you should be on the lookout for detailed information regarding the fees and arrangements that you have with the service providers for your plan.  You should read this information and determine whether the services and fees are reasonable and appropriate for your plan. 

Participant Disclosure: In May of 2012 new participant disclosure regulations take effect.  Under these regulations, you will need to make sure that all of your employees who can participate in your plan receive certain information about the plan, its investments, and the fees that can be charged against their accounts. 

As an employer, are you prepared to provide this information to your employees? If you have any questions or concerns about fee disclosure, talk to your plan’s service providers. Once the necessary information is provided, we recommend keeping an “open-door” policy for any questions that may arise.

Fiduciary Redefinition: In 2011 the DOL proposed changes to the definition of a “fiduciary” as it relates to investment advice within a retirement plan.  The proposed changes would have significantly broadened the group of investment advisors that would be held to the fiduciary standard.  However, widespread dissent over the scope and significance of the changes caused the DOL to withdraw those regulations this last fall.  Even so, the DOL has not given up and has promised to re-propose the regulations in 2012.  

Congressional Action: Be on the lookout for proposed legislation that could change the way our private retirement system works.  We have already seen several proposals that would harm retirement savings by employees.  Budget pressures may cause politicians to look at tax expenditures for retirement plans as a source of revenue.  We strongly encourage you to contact your elected officials and tell them what your retirement plan means to your company and its employees.

While these changes are sure to present short-term challenges and obstacles, it is important to keep your focus on the ultimate goal of promoting retirement readiness.   Helping your employees reach that goal will be well worth your time and effort.

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